With their RX1 camera, Sony has achieved what many thought impossible--miniaturization of the FF format.

I don't know how the myths about FF manufacturing difficulties, size, and weight, etc. got propagated, probably because people have short memory.

film and digital

There were plenty of tiny 35mm cameras in the film days, there is nothing that prevents manufacturing of tiny digital cameras with FF sensor other than cost. Their weight doesn't have to be bigger than their small sensor counterparts. It's the speed of the lens that makes it big, not the fact that it's FF, or APS-C, or m4/3. Just think about this. Which one is bigger (and more expensive): a Panasonic 12-35/2.8 for m4/3 or an equivalent FF lens 24-70/5.6?

Regarding manufacturing costs, as the old saying goes, every chip eventually costs $1. At this time FF sensor can't be cheaper than $100 due to wafer costs, but with falling silicon prices and manufacturing costs (taking into account inflation) one day FF sensor will be cheaper than other camera components and we'll see under $1G FF cameras smaller and with better image quality than the best APS-C today.

Yes. From P&S to FF the electronics are the same size. The LCD is the same size. The EVF (if present) is the same size. Gazillions of FF cameras had small sharp prime lenses. The only reason a FF camera needs to be bigger than older film compacts is the LCD and Sensor are thicker than the old pressure plate and back, but that is a matter of 3/8" (10mm) or so.

That's a bit too simplistic. I had some of the sharpest FF compacts out there (Yashica's with Zeiss etc.) and yes they were sharp for what they were and relative to it's era, but they wouldn't be sharp compared to today's standards where we have 24 million pixels to stare at enlarged on our monitors. Not to mention they suffered a lot more from vignetting, corner softness, distortion and such at apertures such as f/2.8, nothing that would be called challenging apertures today. In other words, it's not just lens speed when just looking at the lenses.

And electronics and electronics related parts do have to be larger for a FF digital camera, for starters because heat becomes more of a problem with larger sensors, especially when LV and video come in to play. And in theory a larger sensor consumes more battery juice as well, all being equal, in which you'd have to compensate for it with a larger capacity batter at some point.

The question is whether FF sensors will significantly drop in fabrication cost as quantity rises with the new $2000 Canikon entries.

All that said it is unclear to me that a pocketable FF compact is a significantly better package than something like the Coolpix A, and any FF zoom will be much larger than the amazing RX100.